U.S. Net Investment Position Narrows to -$21.27 Trillion in Q1 2026

The U.S. net international investment position stood at –$21.27 trillion at the end of the first quarter of 2026, against a revised –$21.87 trillion at the end of the fourth quarter of 2025. The net debtor position narrowed by 2.8 percent — the largest quarterly narrowing since the first quarter of 2025. U.S.-owned foreign financial assets totaled $43.37 trillion at quarter-end and foreign-owned U.S. assets totaled $64.64 trillion, leaving the United States a deep net debtor to the rest of the world even after the quarter's improvement.

That improvement came almost entirely from revaluation of the existing stock, not from any slowdown in external borrowing. Cross-border transactions ran firmly the other way during the quarter.

The Annual Update Rewrites the Baseline

This release carries the annual updates of both the International Transactions Accounts and the International Investment Position Accounts, and the restatement is the dominant fact of the quarter. The fourth-quarter 2025 aggregates, in trillions of dollars, preliminary estimate against revised estimate:

• Net international investment position: –27.54, revised to –21.87
• U.S. assets: 42.96, revised to 42.91
• U.S. liabilities: 70.49, revised to 64.78

Almost the entire revision lands on the liability side: the asset total barely moved, while the measured stock of foreign-owned U.S. assets was marked down substantially. That single change is what carried the revised fourth-quarter net position to –$21.87 trillion.

The methodology changes behind the restatement:

• Direct investment revaluation: improvements to the method for revaluing historical-cost foreign direct investment equity positions in the United States to market value.
• Benchmark survey incorporation: results from the 2022 Benchmark Survey of Foreign Direct Investment in the United States and the 2023 Benchmark Survey of Insurance Transactions by U.S. Companies with Foreign Persons.
• Reserve assets: market valuation of reserve asset securities.
• Portfolio investment: stock swaps incorporated into portfolio investment transactions.
• Other investment: discontinuation of direct investment-related adjustments to other investment loan positions and transactions.

These revisions propagate back through statistics beginning with 1999. Any comparison against a figure published before this release is therefore not like-for-like, and every quarterly comparison below is drawn from the revised series.

Valuation Did the Work, Not Flows

The quarter's improvement in the net position was a price-and-currency effect. Net financial-account transactions were –$209.0 billion in the first quarter, reflecting continued net U.S. borrowing from foreign residents. Those transactions increased U.S. residents' foreign financial assets by $527.3 billion and increased U.S. liabilities to foreign residents by $803.7 billion — foreign investors acquired U.S. assets faster than U.S. investors acquired foreign ones, which is the pattern that deepens a net debtor position rather than easing it.

What pulled the position the other way was the revaluation of the stock already on the books:

• U.S. assets increased $462.9 billion, reflecting increases in all major investment categories except direct investment. Financial transactions of $527.3 billion were partly offset by exchange-rate changes of –$357.1 billion.
• U.S. liabilities decreased $140.4 billion, reflecting a decrease in portfolio investment partly offset by increases in the other major categories. Price changes of –$1.18 trillion were partly offset by financial transactions of $803.7 billion.

The asymmetry between those two lines is the whole story. A price change of –$1.18 trillion marked down foreign holdings of U.S. securities, and because those holdings sit on the liability side of the external balance sheet, the markdown mechanically shrinks what the United States owes the rest of the world. On the asset side, exchange-rate changes of –$357.1 billion cut the dollar value of U.S.-owned foreign holdings, working in the opposite direction but at roughly a third the scale.

This is the recurring hazard in reading the investment position as a scorecard. The position is a stock measured at end-of-quarter market values, and the quarter-over-quarter change is the difference between two snapshots — not a flow of new cross-border investment. A quarter in which U.S. asset prices fall will improve the net position even while the country borrows more, and a quarter in which they rally will worsen it even while borrowing slows.

The Flow Counterpart Kept Widening

The companion transactions accounts confirm that the underlying financing need did not ease. The U.S. current-account deficit widened by $5.8 billion, or 2.6 percent, to $226.8 billion in the first quarter, against a revised fourth-quarter deficit of $221.1 billion. As a share of current-dollar gross domestic product, the deficit rose to 2.9 percent from 2.8 percent. The current account is the flow that must be financed by net sales of assets to foreign residents, so a wider deficit sitting alongside a shallower net debtor position is precisely the signature of a valuation-driven quarter.

Where the Position Sits in Its Own History

The recent path, on the revised vintage:

• End of Q4 2024: –$22.13 trillion
• End of Q1 2025: –$20.95 trillion
• End of Q2 2025: –$21.42 trillion
• End of Q3 2025: –$22.04 trillion
• End of Q4 2025: –$21.87 trillion
• End of Q1 2026: –$21.27 trillion

The series has oscillated inside a band over the past six quarters rather than trending in one direction, which is what a position dominated by asset-price and exchange-rate revaluation looks like at quarterly frequency. Across the four quarters to the end of the first quarter of 2026 the position deepened by 1.5 percent, a materially slower rate of deterioration than the longer arc implies.

That longer arc remains the structural fact. The position stood at –$1.23 trillion at the end of the third quarter of 2007 and at –$22.13 trillion at the end of the fourth quarter of 2024. Measured from the start of 2006, the magnitude of the net debtor position has grown by 1,184.7 percent. Persistent current-account deficits financed by portfolio and direct investment inflows explain the direction; valuation explains the quarter-to-quarter path around it.

What the Next Print Has to Settle

Second-quarter 2026 statistics are scheduled for September 24, 2026, at which point the first-quarter figures are superseded. The single data point that will separate a genuine improvement from a repricing is the liability-side price change. If the –$1.18 trillion markdown of foreign-held U.S. assets reverses in the second quarter while net financial-account transactions stay negative, the net position will resume deepening with nothing having changed in the underlying borrowing dynamic — and the first quarter's 2.8 percent narrowing will read, in hindsight, as a mark-to-market artifact rather than a turn.